Tuesday, December 31, 2013

Friday, December 13, 2013

What Real Estate has that Stocks Don’t!


Most people believe that investing in the stock market is the best way to build wealth. The idea is simple enough: You purchase stock in a company with the understanding that they will work to increase their profits, which in turn, increases the value of your stock. If you’re very lucky, they may even send you dividends based on the number of shares you hold (but don’t count in it—and if they do, it won’t be much).
As you can see, those who invest in stocks are at the mercy of the companies they’ve invested in to generate profits and increase stock value. Many investors find the lack of control in this arrangement to be very frustrating.
For those investors who prefer a more active, hands-on approach, real estate has proven to be an even more lucrative alternative. Once they have acquired a property, these investors have control over a variety of elements affecting the size of their returns, including property condition, rent charged and tenant screening. These decisions have a direct impact on creating a steady stream of cash flow while building equity, both of which will work to build wealth over time.
But it’s not just this control that makes real estate investing so attractive. In fact, the numbers are on the side of real estate investment. For instance, if you had invested $100,000 in the S&P 500 back in January 2000, your investment would be worth $115,190 in June 2013.That same investment in real estate would be worth $214,700 according to median sales price figures from the National Association of Realtors. That’s a 15.19 percent increase for the S&P 500 and a 53.8 percent increase for real estate. And, based on Census Bureau averages of rental pricingduring that time, cash flow from a rental property would generate $97,223.  When combined with the average appreciation over that time period, this investment’s returns would total $251,023—even after the worst housing crash in our generation. Any investor can see that a 151 percent increase is a more attractive proposition than a 15 percent gain.
Certainly, investment properties will have expenses associated with them, such as insurance and maintenance; however, working with a knowledgeable agent to find the right property and do the math ahead of time can help mitigate risk and help ensure cash flow. Partnering with a Certified Investor Agent Specialist® (CIAS) is essential in identifying and negotiating your purchases to ensure a great investment from the outset. 
Considering all the great deals in today’s market, the still low interest rates, tax benefits, and proven stability over time, it’s easy to see that when compared to other asset classes, real estate is indeed the best avenue for building wealth. 





 

Wednesday, December 11, 2013

Another One Bites The Dust!

Anyone can list a house but the Karen Davis Real Estate Team gets them SOLD!!
 

Tuesday, December 10, 2013

Monday, December 2, 2013

The Housing Market Is Bouncing Back!

Housing markets in 52 out of the approximately 350 metro areas nationwide have now returned to or exceeded their pre-recessionary levels of activity, according to the newly minted National Association of Home Builders/First American Leading Markets Index (LMI), released recently.

The index’s nationwide score of .85 indicates that, based on current permits, prices and employment data, the nationwide housing market is running at 85 percent of normal activity.
Baton Rouge, La., tops the list of major metros on the LMI, with a score of 1.41 – or 41 percent better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Harrisburg, Pa. – all of whose LMI scores indicate that their housing markets now exceed previous norms.

Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores of 2.0 or better, meaning that their housing markets are now at double their strength prior to the recession. Also at the top of the list of smaller metros are Casper, Wyo.; Bismarck, N.D.; and Florence, Ala., respectively.
“This index helps illustrate how far the U.S. housing recovery has come, and also how much further it has to go as we continue to face some significant headwinds in terms of credit availability, rising costs for lots and labor, and uncertainties regarding Washington policymaking,” says NAHB Chairman Rick Judson, a home builder from Charlotte, N.C.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of activity. More than 350 metro areas are scored by taking their average permit, price and employment numbers for the past 12 months and dividing each by their annual average over the last period of normal growth.

For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

“Smaller metros are leading the way to a housing recovery, accounting for 43 of the top 50 markets on the current LMI,” observes NAHB Chief Economist David Crowe. “This is very much in keeping with the results of our previous index for improving markets, and is an indication of the extent to which local economic conditions dictate the strength of individual housing markets.”
“The housing markets of 118 metros scored by the LMI this month show activity levels of at least 90 percent of their previous norms – a very encouraging sign of things to come,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.